The Nigerian National Petroleum Company (NNPC) Limited has stopped its naira-for-crude deal with Dangote Petroleum Refinery and other local refineries, raising fears of a possible increase in petrol prices.
With this development, local refineries will now have to buy crude oil from international suppliers, paying in dollars instead of naira. This is expected to drive up production costs and could eventually lead to higher fuel pump prices.
Sources familiar with the matter revealed that NNPC has informed the refineries that it has already forward-sold all its crude oil, even though Nigeria’s crude production has increased since the deal was introduced.
The naira-for-crude initiative was launched on October 1, 2024, as part of efforts to boost local refining, reduce the country’s reliance on imported fuel, and bring down petrol prices. However, multiple sources say the program will now be suspended until at least 2030.
A top industry insider confirmed the development, saying, “The NNPC has notified Dangote Petroleum Refinery and other local refiners that it will no longer provide crude oil to them, as it has forward-sold all of its crude supplies until 2030.”
A concerned source criticized the decision, saying, “At a time when Nigerians are hoping for further price reductions, the NNPC unilaterally decided to end the naira-for-crude initiative.”
The Dangote refinery has not officially commented on the NNPC’s latest decision. However, an official from the company stated that they would carefully evaluate their options before deciding on their next steps.
In October 2024, the Federal Executive Council (FEC) approved the allocation of 450,000 barrels of crude oil for domestic refining, with payments to be made in naira. The Dangote refinery was selected as the pilot project, with an expected supply of 385,000 barrels per day.
However, the NNPC has faced criticism for failing to meet its supply commitments.
The latest development is expected to create instability in the foreign exchange market, reversing recent improvements in the naira’s value.
